Investors looking for stocks in the Medical - Products sector might want to consider either Hill-Rom (HRC - Free Report) or GN STORE NORD (GNNDY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Hill-Rom has a Zacks Rank of #2 (Buy), while GN STORE NORD has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that HRC has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HRC currently has a forward P/E ratio of 19.06, while GNNDY has a forward P/E of 28.12. We also note that HRC has a PEG ratio of 1.66. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GNNDY currently has a PEG ratio of 1.76.
Another notable valuation metric for HRC is its P/B ratio of 4.03. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GNNDY has a P/B of 8.66.
These metrics, and several others, help HRC earn a Value grade of A, while GNNDY has been given a Value grade of C.
HRC sticks out from GNNDY in both our Zacks Rank and Style Scores models, so value investors will likely feel that HRC is the better option right now.